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Tuesday January 4 6:27 PM ET Commodities: Gold Prices Tumble

Commodities: Gold Prices Tumble

By The Associated Press

The failure of glitches to show up with the arrival of the year 2000 sent gold futures prices tumbling in trading Tuesday on the New York Mercantile Exchange.

On other markets, energy futures prices were lower, and grain and soybean futures prices were mixed.

Gold prices usually rise during times of uncertainty. There was a surge in the purchase of gold leading up the New Year as speculators decided to hedge their bets in the event Y2K problems occurred. The smooth transition into the new millennium saw speculators bail out of their gold positions, analysts said.

The decline in the price of gold came despite the continued weakness of the dollar. Gold prices generally move counter to the U.S. currency, as investors turn to one or the other for strength and stability. The dollar's weakness would have to continue over an extended time to push gold prices higher, according to analysts.

Gold for February delivery was $5.90 lower at $283.70 a troy ounce.

Crude oil futures prices fell on the New York Mercantile Exchange in their first day of trading in the new year.

The February contract tumbled by as much as 89 cents in early trading, but recovered ahead of the release of the American Petroleum Institute inventory data, which was expected to show a decline in stockpiles of crude and gasoline.

After the close of trading, API reported that U.S. crude oil stores fell 1.568 million barrels to 292.335 million barrels in the week ended Dec. 31.

U.S. gasoline inventories fell by 475,000 barrels to 191.343 million barrels. Refineries operated at 89.7 percent capacity, up slightly from 89.3 a week ago.

February light sweet crude was 5 cents lower at $25.55 a barrel; February heating oil was .09 cent lower at 67.78 cents a gallon; February unleaded gasoline was .88 cent higher at 68.50 cents a gallon.

Above-normal temperatures in much of the nation sent natural gas futures prices tumbling. February natural gas fell 15.3 cents to $2.176 per 1,000 cubic feet.

In London, North Sea Brent crude for February delivery fell 69 cents to $24.39 a barrel.

Soybean futures prices surged and grain futures prices were mixed in trading on the Chicago Board of Trade.

Soybean prices recovered all of Monday's decline of 51/4 cents as the market reacted to a weather forecast calling for dry conditions over the next several days in Brazil's soybean crop area.

Wheat futures prices were fractionally lower, after recovering from steep morning losses. The early decline was triggered by news that Pakistan purchased 500,000 metric tons of Australian white wheat, snubbing U.S. wheat. Prices also were pressured by snow in parts of the U.S. red winter wheat belt, which should help development of the crop.

Corn futures prices were higher in a technical correction after Monday's weak close. There were ideas in the market that corn was oversold.

Despite the rise in corn prices, the market continues to be burdened by a supply surplus and relatively weak export demand, analysts said.

Wheat for March delivery was a 1/4 cent lower at $2.471/4 a bushel; March corn was 21/4 cents higher at $2.03 a bushel; March oats were 3/4 cent higher at $1.09 a bushel; March soybeans were 7 cents higher at $4.711/2 a bushel.

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